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E4.1010 Result of falling within IR35

Where IR35 applies, income tax and NIC must be paid on a minimum amount of salary. Tax and NIC will be paid as normal on salary and benefits payable to the individual by the intermediary during the year. A deemed employment payment¹ (see E4.1011) is calculated at the end of the tax year based on income from contracts within IR35 to the extent that this income exceeds the normal salary and benefits. The details of how to calculate this payment are set out at E4.1011.

This payment is usually treated as being made on the last day of the year², although in certain circumstances it may be treated as paid earlier (see E4.1025)³.

From 6 April 2016, where IR35 applies the employment intermediaries travel rules also apply (see E4.718) and each engagement is treated as a separate employment for the purposes of determining deductions for travel expenses. Note that